London and Brussels rush time to avoid a no-deal Brexit

Negotiators from the European Union and the United Kingdom are making one last effort to bridge the important differences in their positions, as time is running out to reach a post-Brexit deal. At stake is the blueprint for future trade and other relationships in the years, perhaps decades, to come.

Michel Barnier, the EU’s chief Brexit negotiator, is due to brief the EU ambassadors early Monday. Another day of talks between the EU and the UK in Brussels should take place before Boris Johnson and Ursula von der Leyen speak again on Monday night.

The British prime minister and the president of the European Commission gave the go-ahead for the talks to resume on Saturday, after a day of hiatus in which both sides agreed that they could go no further.

Unless a pact is reached in the next few days, a scenario with the dreaded no-deal Brexit looms, which would bring with it additional costs and the interruption of a relationship that, in any case, will undergo abrupt changes when the transition period expires at the end of the year.

On Sunday night reports were published citing European Union sources claiming that both sides had found a common ground on one of the main points of contention, fishing rights, which were quickly rejected by the British. Barnier himself reportedly downplayed them upon their arrival at the EU ambassadors meeting on Monday.

It is understood that important differences remain in the other key issues, future competition rules, and a mechanism to monitor a deal. The two issues are related: in exchange for granting the UK privileged access to its markets, the EU wants to make sure it can take effective action should London try to undermine European business or take steps to gain an unfair advantage.

The issue of enforcement has grown in importance since the UK decided to annul part of the binding divorce agreement signed last year in relation to the Northern Ireland settlements.

The British Government intends to continue down that path when the legislation in question, the Internal Market Bill, is re-tabled in the House of Commons on Monday. A tax bill is expected to be introduced later this week that also contains provisions that contravene the withdrawal agreement.

It means that the EU could find itself in the position of having to make a decision on an agreement on the future relationship, at the same time that the United Kingdom is reneging on the international treaty that the two parties agreed to just a year ago, after a long and tortuous process.

At this stage, the politics is as important as the technical details: both parties must avoid the impression of giving in. France, which has repeated the threat to veto a “bad deal”, has led a group of countries eager to protect the EU’s fishing rights and the integrity of the single market. The UK government, for its part, is adamant that a deal must respect British sovereignty, which it says is the essence of Brexit.

It is a watershed moment for Johnson, whose pro-Brexit colleagues played a big role in voting to leave the EU and then brought him to Downing Street.

The prime minister has stressed the importance of achieving the kind of independence promised by slogans such as “retake control.” But now he faces a reality that involves either compromise, or the pursuit of a no-deal scenario that would mean tariffs and other costly barriers to trade, sinking relations with Europe to a new low in the process.

The EU, for its part, must determine to what extent it tries to defend its own “red lines”, or give ground to secure an agreement and avoid a scenario that would also affect its own economy.

Even if the UK and EU negotiators reach an agreement, it is not the end of the story. The legal text would have to pass before the national leaders of the EU – who will meet at a European Council summit later this week – and be approved by the United Kingdom and European parliaments.

London left the European Union last January, but has continued to be subject to and apply most of the EU rules during the transition period. With or without an agreement, the most important changes will be put in place in trade and other matters from January 1.

What they say about the prospects for a deal

“Let’s see what happens,” said British chief negotiator David Frost when he arrived in Brussels on Sunday, amid an increasingly gloomy outlook on progress on all pending points.

“I think that unless we can resolve these rather fundamental divergences … we are going to have to take a position in the next few days,” UK Agriculture Minister George Eustice had previously considered.

Irish Foreign Minister Simon Coveney admitted to RTE that “we are in a difficult spot as we try to shut it down.” The country’s prime minister, Michéal Martin, ventured the possibilities of a 50-50 agreement.

“We will see if there is a way forward,” Michel Barnier wrote on Twitter Saturday night, after von der Leyen and Johnson gave the go-ahead for the talks to continue.